Gartner warns of slowing PC demand, downgrades forecast

Gartner has warned that the litmus test for recovery in the PC market will come in the second half of the year but the early signs are not encouraging.

The market watcher expects shipments to rise 19.2% in 2010 to 367.8 million units but has downgraded its growth forecast for H2 to 15.3%, roughly 2% lower than previous estimates.

Ranjit Atwal, research director at Gartner, said its decision was based on the "uncertain economic outlook" in mature markets on both sides of the Atlantic.

"There is slowing demand from consumers, retailers are delaying orders and suppliers have adopted a risk-averse strategy as nobody wants to get stuck with too much inventory as in 2009," he told MicroScope.

Despite the austerity measures in Europe that are currently weighing heavily on the minds of consumers, businesses have continued to refresh ageing estates said Gartner.

"Businesses are still buying and while consumers may pull back in the short term, it will return strongly as most view the PC as a relative necessity rather than a luxury," argued Atwal.

Late last week Intel pulled down its Q3 revenue projections by up to $1bn (£644m) on the back of weaker than expected demand for PCs among shoppers but the outlook of Taiwanese ODMs are also less than rosy.

Quanta, which manufactures laptops for HP and Apple, today said it expects Q3 sales to be flat sequentially with president CC Leung blaming the weaker global economy, while Compal is expected to make similar noises tomorrow.

There was more inventory in the channel than vendors were comfortable with in July, said Gartner's Atwal and while August proved to be much better, "maybe the market has not come back sufficiently," he suggested.

The volatility of matching supply and demand means that should sales pick up in H2, resellers could be faced with shortages, Atwal warned.

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